Fake tax collection scammers have made more than $70 million a year stealing money from people in the United States. If you are in tax debt and worry about the IRS coming for you, here’s a guide to making sure the money you owe goes to the Treasury and not some gangster.
Types of scam
The IRS is onto this and has listed four common types of tax collection scams. These are:
- EFTPS scam: You will get a call from someone saying you must pay the money now on the phone, with the scammer saying they will put you through the IRS electronic payment system the EFTPS. In this case, put the phone down and do not pay.
- ‘Robocalls’ are robotic voices that tell you if you do not call the scammer on a certain number they will have you arrested. The IRS cannot have you arrested! Ignore.
- Private debt collection agency. The IRS will have written to you if you have had your tax debt sent over to a private debt collection agency. If you haven’t had that letter detailing exactly whom you are dealing with, ignore!
- English not your first language? You may have an email or call threatening you with deportation, arrest or license revocation in your first language. Again, ignore.
The IRS is very structured in the way it deals with people with tax debts. In the next section, we will look at how a real-world tax debt will be dealt with by the IRS and then in the final section, how to spot a scam.
IRS due process
Should you owe them tax, the IRS will write to you demanding that money. If you ignore that you will get a letter giving you at least 30 days’ notice informing you of the punitive action planned by the IRS – this might be wage garnishment or even seizing assets. Look at our blog to see what punitive action the IRS can take in these instances.
Where you have had those letters, at the earliest instance you should contact us at Defense Tax to discuss how to deal with your tax debt. We will make the task a lot easier and potentially reduce the amount of money you eventually pay the IRS after we have negotiated with them.
Above all the IRS will never phone you or email you out of the blue to make financial demands that you must act on immediately. The IRS has published a simple set of signs that your email or phone call is from a scammer. Let’s look at this in the next section.
Spotting a scam
The IRS has released a guide on tax collection scams. It states, “The IRS (and its authorized private collection agencies) will never:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. The IRS will usually first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.”
- If you believe that you owe the IRS money, then there are some simple steps you should take to make sure that you are paying the right people:
- Check how much you owe the IRS through their online portal at https://www.irs.gov/payments/view-your-tax-account
- If you are called by a real person, say you will make payment through the EFTPS system that you will call yourself. Their enrolment page can be found here.
- If you are called by someone saying they are a debt collection agency and who want a check from you, who is the check addressed to? If it is anything but ‘U.S. Treasury’ the money is going in a gangster’s pocket.
You’re not alone!
Millions of Americans get scammed every year, sometimes for disgusting amounts of money. By being alert and looking at the detail, and most importantly after checking the facts on the IRS portal, you should be able to ensure that your hard earned cash only goes to the tax man and not a private gangster.